Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/204798
Authors: 
Kopp, Daniel
Siegenthaler, Michael
Year of Publication: 
2019
Series/Report no.: 
KOF Working Papers 462
Abstract: 
Can governmental policies mitigate the effects of recessions on unemployment? We study whether the Swiss short-time work (STW) program reduced unemployment in the 2009-2015 period using quarterly establishment-level panel data linking several administrative data sources. We compare changes in permanent layoffs into unemployment, hiring from unemployment, establishment survival and size between establishments that applied successfully to establishments that applied unsuccessfully for STW at cantonal employment agencies. The latter appear to be a valid control group for the former among others because of substantial idiosyncrasies in cantonal approval practices. We find strong evidence that STW increases establishment survival and prevents rather than postpones dismissals: the 7,880 establishments treated in 2009 would have dismissed approximately 20,500 workers into unemployment (0.46% of the labor force) until 2012. Most workers would have been dismissed in the quarters immediately following application and more than a third would have become long-term unemployed. We estimate that the savings in terms of unemployment benefit payments may have been large enough to compensate the spending on STW benefits for the Swiss unemployment insurance.
Subjects: 
Great Recession
Labor demand
Layoffs
Labor hoarding
Short-timework
Unemployment
Work sharing
JEL: 
E24
J23
J63
J65
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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